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 Post subject: Some interesting reading
PostPosted: Fri Mar 24, 2006 2:25 am 
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Robert Walls

Joined: Tue Mar 01, 2005 12:44 am
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Just thought I'd trawl through the news archives on the clubs website and throw up a few things for people to digest/comment on...

elliots statement following ousting at end of 2002
http://carltonfc.com.au/default.asp?pg= ... leid=66705

Quote:
The Carlton Football Club is strong. The combined loss of the Football and Social Club will be less than $180,000 – not the $500,000 loss previously expected. This is a remarkable result given the on field performance of the team in a tough football business environment.


2003
http://carltonfc.com.au/default.asp?pg= ... leid=73794 - 8.08am - debt is 13mill according to AAP

http://carltonfc.com.au/default.asp?pg= ... leid=74547
- 10:37pm - debt is 8mill, just raised 400k at Heroes Gala according to Ash Browne

http://carltonfc.com.au/default.asp?pg= ... leid=99927
- 500k raised from fightbackrally, memberships up 26%

2004
http://carltonfc.com.au/default.asp?pg= ... eid=134798
we lost 7.5mill in 2002 (didnt see an article on it though and i imagine it wasnt a cash loss). Key figures - 2003 revenue down 600k despite membership increase, football club loss for 2003 just over 1mill, social club 1.2mill profit - overall 200k profit.
Quote:
And Collins said the Blues still needed to find a home game sponsor, ball and shorts sponsor before the start of the 2004 season – which would be worth around $1 million to the club – although he was confident this would be achieved.
Collins said the club has also formed a sub-committee – headed by board member Graham Smorgon – to investigate whether it was better financially for the club to move its home games to either the MCG or Telstra Dome or continue to maintain its current situation of playing its big home games against the likes of Collingwood, Richmond and Essendon* at the MCG and playing its smaller home games at its century old home ground.

However Carlton chief executive Michael Malouf said if the Blues did remain at Optus Oval, they would have to spend at least $300,000 annually on ground improvements to maintain the ground to AFL standard as opposed to less than the $100,000 per year they are currently spending.

therefore according to club statement if sponsors found we SHOULD have been looking at a breakeven for 2004 for footy club and perhaps another 1.2mill profit from social club? However it is the ground costs which have me interested - spending 100k/yr and need to spend 300k/yr on upkeep.

http://carltonfc.com.au/default.asp?pg= ... eid=134977

Quote:
In 2002 the Club recorded the worst results both on and off the field in the long and proud history of the Carlton "Group", recording a loss of $7,558,858.
Rearranging the finances has enabled the Carlton "Group" to reduce long-term debt from $8.065m to $1.637m.# "The Boards felt it was appropriate to designate future cash flows from AFL income for the Optus Oval buyout games and the sale of Waverley proceeds to the long-term debt reductions, albeit causing some short-term cash flow difficulties," said Mr Collins.
The financial results for the two entities in 2003 were:
# Carlton Football Club recorded a loss of $1,067,259 (loss of $3,896,180 in 2002)
# Carlton Cricket & Football Social Club recorded a profit of $1,258,728 (loss of $3,662,678 in 2002)
The poor on-field results had a negative impact on revenues, which was most evident in Gate Receipts (in particular for the two "blockbuster" home games at the MCG) at Club Events and through Corporate Sponsorship and this is reflected in the Carlton Football Club results.

I'd expect a significant amount of 02 losses were writedowns, otherwise i'd struggle to see how the social club side could experience a 4.8mill turnaround given the minimal outgoings that i imagine it would have. Perhaps someone familiar with footy clubs could explain?

May04 - http://carltonfc.com.au/default.asp?pg= ... eid=148976 - first mention of plans to move grounds
july04-
http://carltonfc.com.au/default.asp?pg= ... eid=163825 - further mention of home grounds - interestingly the cost of maintaining optus is no longer stated but is refered to as significant
Quote:
If the Optus Oval alternative is to be a viable option however, the ground will require a major financial injection to bring the facilities up to an appropriate standard to accommodate AFL football on an ongoing basis. Also, significant annual funds will be required to maintain the facilities – if games are to be played there for the next 10 years. These funds have not been provided for a number of years and the facility has accordingly deteriorated.

http://carltonfc.com.au/default.asp?pg= ... eid=163827 - mention of grant samuel and associates as doing the independant financials of the move
Aug04 - http://carltonfc.com.au/default.asp?pg= ... eid=166768 - the reccomendation to move.
Quote:
To play home games at the MCG and the Dome for a period of 10 years will have a financial return in today's dollars of between $22 - $26 Million. For comparison purposes the financial return for Optus Oval is approximately $14 Million. The mix of games between the Dome and the MCG provides a deal that is considered the best to meet the short and long-term interests of the club. In addition, Carlton will receive a significant cash up-front payment from the AFL which will assist the unwinding of contracts in relation to Optus Oval.
To ensure Carlton has access to facilities in keeping with the standard that has been set by Essendon* and the interstate clubs, and more recently Collingwood, we are envisaging a redevelopment of the training facilities at Optus Oval in the order of $15 to $20 Million," Mr Smorgon said.
Continuing to play home games at Optus Oval for the next ten years, would require a minimum of $10 Million to bring the facilities up to an appropriate standard to accommodate AFL football on an ongoing basis. Indeed, we do not even make enough money from this ground to carry out appropriate levels of maintenance for the most basic of facilities.Mr Smorgon said "The Board also committed to consider other factors such as membership, attendances, sponsorship, free to air television coverage, car parking, availability of public transport and the overall potential for growth of the Club. An analysis of these factors clearly shows that Carlton has fallen behind the leading AFL Clubs and will continue to do so unless changes are made to enable growth."

For instance, since 1996 Carlton's membership has only grown 37% compared to Essendon*'s growth of 53% and the Collingwood growth of 98% and Optus Oval does not provide the opportunity for any prime time free to air television coverage.


also in Aug04 - http://carltonfc.com.au/default.asp?pg= ... eid=165153
Quote:
Carlton's management, administration and football department will remain at Optus Oval, with between $15 and $20 million to be spent by the club, the state government and the City of Melbourne in improving training facilities.

While the financial advantages - the Blues stand to be up to $10 million better off over the next 10 years - of moving made impressive reading, chief executive Michael Malouf was keen to stress it didn't all come down to numbers.

"This was not just purely a financial decision. We've taken into account as many non-commercial elements as you can imagine to come to this decision, including the emotional aspect of it and the passion."

The first line quoted reads to me as if the money was already agreed on. Anyone disagree with this?
Aug04 agaain - http://carltonfc.com.au/default.asp?pg= ... eid=165650 -
Quote:
Should Carlton remain at Optus Oval, Malouf said forecasts indicate the club's financial situation will become so dire that by November 2005 it will be unable to service its debt.

The club released figures indicating it had, as of July 2004, a debt of around $3million, which is forecast to grow to in excess of $8million by November 2005 if the move wasn't made.

"That means that, in that period of time, we have about 12 months to get this business in line, to get back within our cash flow facilities otherwise there are some ramifications for this club and its members … understanding its status as a going concern."

The club would need a $10million capital injection and find $500,000 in annual maintenance costs to bring the facilities up to current AFL standard, money that just isn't available, Carlton vice-president Graham Smorgon said.

key figures are 3 million in debt, and ground costing 500k/annum to maintain AFL standard ground. I also find it difficult to believe that we would lose 5mill if we didnt move (figure could only really come from sponsorship losses? given that TPP pool wouldnt increase that much, attendances would remain stagnant, membership presumably around similar levels, bank interest would be 300k on 3mill debt)

nov04 - http://carltonfc.com.au/default.asp?pg= ... id=179244- as an aside, do we ever charge the AFL for using the ground? if not perhaps the club should :P

feb05 - http://carltonfc.com.au/default.asp?pg= ... id=187770-
[quote]Club President, Mr Ian Collins AM advised that the majority of the loss of $11.1M related to the value of the Stands being written down and depreciated.

The value of “the Group’sâ€


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PostPosted: Fri Mar 24, 2006 2:57 am 
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Bruce Doull
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Well done 4th............

the kind of early morning light reading i like...............!


kindest regards tommi

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PostPosted: Fri Mar 24, 2006 3:02 am 
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Robert Walls

Joined: Tue Mar 01, 2005 12:44 am
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after digesting through all that some further questions/comments
1. Our actual debt appears to be 3mill consisting of 2.5mill legends stand and 500k overdraft. The $4mill in advanced monies should probably not be accounted for as debt which is then 'repaid' but perhaps written off for accounting purposes (as no transactions will occur in future). I dont see what happened to the apparent 15mill liability from a year earlier though (no mention of it since)
2. The 4 mill in advanced monies I would hazard a guess is upfront money from TV rights, sale of waverly etc as opposed to a loan.
3. The cost to upkeep PP at AFL standard went from 300k in Feb 04 to 500k in Aug04 through to 1-2mill in recent articles (1.8mill in the last article) - A staggering 600% increase within 13months?
4. Social club revenue - any one have historicals for this? P/L for this entity went from 3.6mill loss in 02, to 1.2mill profit in 03, through to 1.2mill loss in 05 (didnt see financials for 04). Quite a large fluctuation - could someone explain the social clubs activities etc to me please? - income (drinks/pokies?) and outgoings?

I'm guessing that the club has moved the annual 1.2mill social club expenses into PP upkeep costs? - that is the only way that i can think of in which the costs would go from 300k to 1.8mill. Its still a bit dodgy to me though.

What I think is even dodgier though are the following statements in august04...

Quote:
While the financial advantages - the Blues stand to be up to $10 million better off over the next 10 years - of moving made impressive reading, chief executive Michael Malouf was keen to stress it didn't all come down to numbers.

Quote:
The club released figures indicating it had, as of July 2004, a debt of around $3million, which is forecast to grow to in excess of $8million by November 2005 if the move wasn't made.


Given that we would have been 10mill better off over the 10yrs and that we would have lost 5mill if we didnt move, does that mean we will only be 5mill better off over the next 9 yrs (ie just over 1/2mill/yr)? Those are somewhat disappointing financials given that we now have 1.5mill/yr to service PP (and will end up selling out our lease to the AFL for) AND that the 3mill (I think?) upfront payment to break contracts for the dome move apparently DIDNT cover contracts relating to the social club (one of the given reasons for the social club losses) AND that we are possibly 1mill worse off each year with respect to social club revenue.
:shock:


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PostPosted: Fri Mar 24, 2006 4:27 am 
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Alex Jesaulenko
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The CFC no longer need to keep the ground (seats, etc.) to an AFL standard so much of that 300,000 odd figure would no longer be needed now.

That 1.8M figure (although it has always sounded high) is more to do with general maintenance and running costs (I think).

So I think they are two different things.

There are plenty of accountants on this board that might be able to explain it. :?:

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PostPosted: Fri Mar 24, 2006 7:46 am 
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Alex Jesaulenko

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Why cant I read the links :?:

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PostPosted: Fri Mar 24, 2006 7:49 am 
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Mike Fitzpatrick

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4th Chicken I will help you get the understanding of the 4 million dollars. The 4 million dollars comes from a bank and is guaranteed by the AFL. It becomes "interest only debt" for Carlton and several other clubs (about 8) who choose to have access to this money prior to it being due to help with cashflow.

The AFL gives 4 million dollars to every club as a dividend at the end of the season. Clubs like Carlton, Bulldogs, Kangas, Melbourne etc can't wait till the end of the season. Hence if you decide to take it early it becomes an interest bearing loan for the period the club has decided to take it in advance. Clubs like West Coast, Adelaide, Collingwood, Essendon* etc. don't need the money and just receive the 4 mio dividend at the end of the season "no strings attached".

No AFL club has to pay it back. If you take it in advance it is interest bearing debt until the end of the season.


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PostPosted: Fri Mar 24, 2006 7:52 am 
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Bruce Doull
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Accountants can put a decimal point anywhere ....

I agree.. that "transparency" Collo talked about before winning presidency is out the window.

Everything is as clear as mud still.......


These blokes dont feel sorry for the average Carlton supporter.. its as if we havent been kept in the dark and fed bullshit enough over the last decade... they think we need more!!!

But like Swan McKay said "We need fresh blood"... so if you havent voted you have about eight hours to vote for 'change'.

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PostPosted: Fri Mar 24, 2006 8:19 am 
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Bruce Doull
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The lease of the ground (until 2035) is held by the Social Club. With no games, there's no revenue generated.

If they can covert it to a training facility and open a gym, things would turn around. Not sure how much but any cash flow is good. Also, given the nature of the area, they could lease out space to open shops within the facility such as a health food cafe or something along those lines, could really pay off for them if they play their cards right.

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PostPosted: Fri Mar 24, 2006 11:56 am 
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Robert Walls

Joined: Tue Mar 01, 2005 12:44 am
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if u have trouble with any of the links then just look up the CFC news archives - just work back from page 53 or something :P


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